Results tagged “Federal Trade Commission” from IABlog

We start the New Year by addressing a question that’s on many people’s minds in the digital industry… 

Will the FTC provide guidance on native advertising in 2015
and, if so, what might we expect?

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At December’s IAB Native Advertising Disclosure Workshop, which was attended by Laura Sullivan, Senior Staff Attorney, Division of Advertising Practices at the Federal Trade Commission, along with nearly 200 IAB event registrants, there was some speculation that the FTC had plans to provide guidance for native advertising. 

I sat down with Mike Zaneis, Executive Vice President, Public Policy & General Counsel from the IAB’s Washington, DC, office to get some perspective on what FTC guidance for native advertising might entail. 




When the FTC provides “guidance” on a specific advertising topic, what does that mean? Why do they do this?
Companies may be familiar with legal regulations that have been promulgated by the FTC, such as those issued last year under the COPPA statute. These regulations have the force of law and must be followed by companies. The FTC also brings enforcement cases against “unfair or deceptive” business practices.  Because this authority is extremely broad, the FTC sometimes helps companies understand what may be expected of them by issuing formal guidance. These documents provide examples of good or bad business practices and may provide direction in new or emerging marketplaces. 

Although it is speculative at this point in time, what might we expect from guidance on native advertising disclosure?
In the past, the FTC has issued broad-based guidance as well as guidance for specific business models. In the native advertising space they have only delved into the search advertising space, issuing guidance in 2002 and then providing an update in June of 2014. It is hard to predict what type of guidance they may issue in the future, but the focus on multiple business models during their 2013 native advertising townhall is a clear indication of the scope of their interest.  

The IAB, via its Native Advertising Task Force, issued the Recommended Native Advertising Disclosure Principles below as part of its Native Advertising Playbook (published 12/13). How similar or different might the FTC’s guidance look?

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The IAB disclosure principles are a good example of the broad-based guidance that I described above. At their core they simply attempt to apply the existing law around advertising disclosures to the emerging field of native advertising.  In this case we might expect similarly broad language from the FTC, accompanied by specific examples in several native advertising categories such as In-Feed and Recommendation Widgets as outlined in the IAB Native Advertising Playbook. This was how they developed their “.com Disclosures” guidelines in the past.

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FTC.com Disclosure document. Source: FTC

Do you have any suggestions on what, if anything, publishers/marketers/agencies could or should do in anticipation of potential guidance being issued for native advertising?
As an industry we should strive to be proactive versus reactive in this area. At the IAB’s recent native advertising townhall event we heard from more than a dozen companies about how they are evolving their disclosure practices. These developments ensure that consumers understand where the content on the page ends and the advertisement begins. Many of us long assumed that disclosure and consumer engagement were countervailing forces, but we are discovering that, to the contrary, an informed consumer is a happy, engaged consumer.

How does the FTC announce that they are providing formal guidance?
There is no set process for issuing guides. In the ideal scenario they will publish a draft and solicit public comment before finalizing the document. However, they have sometimes simply issued new guides without a comment period or, in the case of search advertising, just sent letters to a number of companies to provide details on the updated guide.

If guidance is issued, how should publishers/marketers/agencies respond?
While they do not carry the same legal weight as a regulation, guides provide insight into the types of areas where the FTC may bring future enforcement actions. Therefore, companies should pay close attention to the “advice” provided in these documents and double check their current business practices against them. Guidelines are usually just that, guidelines, and they should provide room for variation, responsible experimentation, and future innovation.
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For those who had questions about potential FTC Native Advertising Disclosure Guidance, we hope these answers were helpful. The IAB will continue to advocate that disclosure is of paramount importance for this growing source of digital advertising revenue. We will continue to provide updates on potential FTC guidance as/if available.

About the Author

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Susan Borst

Susan Borst is the Director, Industry Initiatives and IAB liaison for the Content Marketing and Native Advertising Task Force groups, along with the Social Media, B2B and Game Advertising Committees at the IAB. She can be reached on Twitter @susanborst 


 

The Digital advertising industry exists in a complex legislative and regulatory environment. Policies in Internet governance, privacy, advertising, taxation, and intellectual property all have significant impacts on the growth and direction of the industry.

 And these policies are not being developed in one place. Within the Washington, DC beltway, laws and industry guidance are promulgated by regulatory agencies, such as the Federal Trade Commission or the Federal Communications Commission, the judicial system and past precedent set by court cases, and legislation enacted by Congress.

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To make this policy landscape even more complex, the digital advertising industry must also be cognizant of local and international laws. As those working in the industry know, digital advertising is borderless in nature and therefore depends upon a base level of legal cohesion among countries and regions. Disruptions stemming from policies in one nation, or U.S. state, are felt globally. Take, for example, two recent anecdotes from Europe.

On October 21, a data privacy bill before the European Parliament passed through committee on its path to becoming law. This draft bill, created in response to the recent revelations about U.S. national security data-tracking practices, directly impacts the digital advertising industry in several ways. For one, the bill calls for explicit consent before a wider variety of processing activities. The bill would also create new barriers to transferring information about EU citizens to the U.S. Perhaps most importantly, the bill proposes a new definition of personally-identifiable information that includes “online identifiers.” The European Parliament will now negotiate with the Council of the EU to reach a compromise agreement.

Contemporaneously, the EU is considering whether or not to allow the U.S.-EU Safe Harbor Framework to continue. This framework allows participating U.S. companies to comply with EU privacy rules through a streamlined self-certification process. Under this framework, Over 4000 companies, and many IAB members, have demonstrated their high level of privacy protection in order to work with European companies and serve European citizens. Although Safe Harbor is focused on addressing commercial privacy practices, the value of the Framework has been questioned in recent months in association with national security concerns.

Were digital advertising practices and technologies static, there would already be a complicated set of rules to follow. But industry practitioners know that digital advertising is never static. Innovations are constantly created that raise new public policy questions. This is evidenced by the FTC’s recent interest in native advertising and the Internet of things.

To help the digital advertising industry identify the policies relevant to them, the IAB has created an online Legislative and Regulatory Tracker. This webpage summarizes draft legislation and regulations that will impact our ecosystem, and categorizes these proposed laws by subject, such as children’s privacy, location privacy, and trade. It also offers IAB’s positions on the draft laws, providing further insight into how IAB is working to promote growth in the interactive marketplace on behalf of its members. Whether you’re a publisher, advertising network, or marketer, we hope you find this service helpful in navigating the complex policy environment.

This tracker will continually be updated and expanded, so check back regularly for up-to-date information on the policies that could affect your business. For more updates on the IAB’s public policy work, visit the IAB public policy website. If you have questions about the tracker or IAB’s other public policy initiatives, please feel free to email me at [email protected].

About the Author

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Alex Propes

Alex Propes is Senior Manager, Public Policy, at the IAB.

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Last week, after a round of visits with advertising organizations and private declarations that its cookie-blocking plan was not a “done deal,” Mozilla Foundation, the lucrative nonprofit whose Firefox browser controls 20 percent of the world’s access to the Web, launched a new proposal to “address privacy concerns related to third party cookies in a rational, trusted, transparent and consistent manner.”

But Mozilla’s “Cookie Clearinghouse”  is neither new nor a proposal, inasmuch as the no. 2 browser-maker seems hell-bent on implementing on a tight deadline cookie-blocking by fiat. It is not a clearinghouse for cookies - it is a kangaroo cookie court, an arbitrary group determining who can do business with whom.  It replaces the principle of consumer choice with an arrogant “Mozilla knows best” system. It is not “independent,” as Mozilla claims, but is stocked with self-interested academic elites with whom Mozilla has long histories. Nor is it rational, trusted, or transparent, as I will describe below. 

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But oh, is it consistent - consistent with the history of large technology providers with substantial market shares wielding the indisputably virtuous concept of “consumerism” as a weapon to fight competitive battles. These browser warriors are indifferent to the collateral damage they might create among the small publishers, retailers, and other businesses that employ more than 5 million Americans, account for 3.7 percent of U.S. gross domestic product, and define the Internet’s richness and diversity.

In February 2012, the IAB and the other groups comprising the Digital Advertising Alliance agreed eagerly with the White House and the Federal Trade Commission to work with the major browser companies to honor browser-based choice for the DAA Principles - principles that underlie a successful self-regulatory mechanism to enable consumers to manage their data in digital environments, including the management of third-party cookies. That agreement, which involved several stakeholder groups, earned praise from the Obama Administration, the Commerce Department, and the FTC. It contrasted sharply with the ongoing challenges experienced by the Worldwide Web Consortium (W3C), the NGO that manages the Internet’s underlying technical standards, in developing similar consensus-based consumer-choice mechanisms for the management of data, privacy, and “do not track” options.

Mozilla’s “Cookie Court” is just another blatant attempt by a powerful tech company to destabilize efforts by multiple stakeholders to reach consensus about how lives and livelihoods should be aligned in the Internet era. Mozilla is reassembling the players whose inexperience and antipathy to negotiation and consensus have subverted the early W3C processes. Its members have blithely gloated about their willingness to “put a number of third parties out of business.” They include technological totalitarians who dismiss negotiations with the haughty declaration that “it’s very difficult to see a long-term consensus approach,” and who equate corporate imposition of “the technologies at the browsers’ disposal” with “the consumers’ side.” 

We admit we were hopeful when Mozilla proffered that its new system for managing cookies would make exceptions for “sites complying with DAA opt-out and supporting DNT.” But its proposal does nothing of the sort. Hundreds of companies, representing thousands of Web sites, belong to the DAA program; yet their advertising will be peremptorily blocked by Mozilla’s system.  Tens of millions of consumers who have visited the DAA site and affirmatively opted to do nothing — effectively choosing to allow ads relevant to them to be delivered — will find their choice sabotaged.  And Mozilla’s argument that sites “supporting DNT” may still be able to deliver relevant advertising is disingenuous.  Since there is not yet a consensus definition for DNT - partly because Mozilla allies have so mismanaged or undermined the process for reaching consensus - it’s not currently possible for sites to support it. 

Worse, there is nothing in the Mozilla system that recognizes, let alone offers solutions for, the particular needs of the many thousands of small publishers and retailers that depend on the Internet supply chain and the third-party cookies that, however imperfectly, are a central component of it. By making it punishingly difficult for advertisers to reach highly engaged audience segments through small publishers dependent on this third-party-cookie supply chain, Mozilla’s new system will prompt marketers to concentrate their ad buys among a tiny handful of giant Internet companies that dominate the deployment of first-party cookies. This fear has led almost one thousand “long tail” Internet companies to sign a petition asking Mozilla to reconsider its determination to block third-party cookies by decree.

The open-source Internet supply chain is a wellspring of strength; it has fostered one of the greatest fast waves of economic and cultural innovation in modern history. It is also a source of weakness, because it creates vulnerabilities in securing individuals’ and companies’ data and in assuring their desire to keep certain activities and interests private. But acknowledging and correcting for those weaknesses doesn’t require taking a blunt sledgehammer and destroying the digital supply chain. Rather, we need rational, consensus solutions that will meet all major stakeholders’ needs.

That Mozilla doesn’t understand this is unsurprising. After all, it represents nobody. It is part of a global distribution cartel whose members have been in a perpetual state of war with each other for 15 years. Browser makers should not be dictating the kind of economic and cultural policies Mozilla is trying to implement any more than television set manufacturers should be deciding which shows make it to your home.

The IAB, our constituents, and our partners in the DAA, have engaged in a serious effort to participate in consensus-building around the complex issues of protecting consumer choice and privacy while enabling the commercial activity that supports a diverse and robust internet.  We welcome other serious participants. We do not welcome Mozilla’s proposed kangaroo court led by the very people who have thwarted consensus in the past … and who have evinced not an iota of concern for the publishers, small businesses, and hundreds of thousands of people that depend on Internet advertising for their livelihood.

About the Author
sp_rothenberg_randall_100x134.jpgRandall Rothenberg


Randall Rothenberg is President and Chief Executive Officer, Interactive Advertising Bureau. 

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Don't Let the FTC Steal Christmas

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The Federal Trade Commission is undertaking a revision of their rules enforcing COPPA, the Federal law that protects families from the unwanted collection of personally identifiable information about their children. The interactive advertising industry supports COPPA and recognizes that a lot has changed in the 14 years since its passage, including the rise of the internet and, more recently, the growth of the mobile marketplace — but we must embrace innovation and the benefits they have brought to families. Recent proposals made by the FTC would conflate benign data transfers, which present no discernible threat to children’s online safety, with very real concerns about the unauthorized collection of information that might allow strangers to contact our children.

IAB hopes that the FTC will not undermine legitimate commercial practices that have revolutionized the way kids learn and play in the digital age. This holiday season let’s celebrate innovation and technology instead of playing scrooge to American families.

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About the Author

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Mike Zaneis

Mike Zaneis is SVP & General Counsel at the IAB.